For the fourth quarter of 2017, Green Dot reported total operating
revenues of $213.0 million and GAAP net income and GAAP diluted earnings
per common share of $12.2 million and $0.23, respectively. Green Dot
also reported adjusted EBITDA1 and non-GAAP diluted earnings
per common share1 of $32.1 million and $0.29, respectively.

Said Green Dot Founder and CEO, Steve Streit, “Q4 was yet another very
strong quarter for Green Dot, capping a year that, on many levels, was
the finest year in Green Dot’s history to date. We beat our financial
expectations with four consecutive quarters of accelerating financial
results and achieved record total operating revenues, record profits and
expanding margins. Furthermore, we saw the return to organic active
account growth in our Account Services operating segment, had multiple
new "Banking as a Service" program wins with world-class partners and
made two strategic acquisitions. We obviously feel great about our
financial results for both Q4 and the full year; but are even more
pleased with how our unique and compelling Products and Platform model
is generating business momentum across both our reporting segments and
each of our revenue divisions, which gives us the foundation for our
optimism regarding growth into 2018 and beyond.”

GAAP financial results for the fourth quarter of 2017 compared to the
fourth quarter of 2016:

Total operating revenues on a generally accepted accounting principles
(GAAP) basis were $213.0 million for the fourth quarter of 2017, up
from $162.8 million for the fourth quarter of 2016, representing a
year-over-year increase of 31%.

GAAP net income was $12.2 million for the fourth quarter of 2017, up
from a net loss of $1.3 million for the fourth quarter of 2016,
representing a year-over-year increase of 1,009%.

GAAP diluted earnings per common share was $0.23 for the fourth
quarter of 2017, up from loss per common share of $0.03 for the fourth
quarter of 2016, representing a year-over-year increase of 867%.

Non-GAAP financial results for the fourth quarter of 2017 compared to
the fourth quarter of 2016:1

Adjusted EBITDA1 was $32.1 million, or 15.1% of total
operating revenues for the fourth quarter of 2017, up from $21.8
million, or 13.4% of total operating revenues for the fourth quarter
of 2016, representing a year-over-year increase of 47% and margin
expansion of 170 basis points.

Non-GAAP net income1 was $15.7 million for the fourth
quarter of 2017, up from $9.6 million for the fourth quarter of 2016,
representing a year-over-year increase of 64%.

Non-GAAP diluted earnings per share1 was $0.29 for the
fourth quarter of 2017, up from $0.19 for the fourth quarter of 2016,
representing a year-over-year increase of 53%.

The following table shows the Company's quarterly key business metrics
for each of the last eight calendar quarters. Please refer to the
Company's latest Annual Report on Form 10-K for a description of the key
business metrics.

2017

2016

Q4

Q3

Q2

Q1

Q4

Q3

Q2

Q1

(In millions)

Number of cash transfers

9.95

9.80

9.55

9.30

9.37

9.36

9.35

9.71

Number of tax refunds processed

0.06

0.10

2.41

8.60

0.06

0.10

2.18

8.18

Number of active cards at quarter end

5.26

5.23

5.15

5.05

4.13

4.09

4.28

4.75

Gross dollar volume

$

8,556

$

7,856

$

7,687

$

7,707

$

5,681

$

5,338

$

5,372

$

6,569

Purchase volume

$

5,645

$

5,206

$

5,226

$

5,503

$

4,012

$

3,759

$

3,863

$

4,708

Said Mark Shifke, Green Dot’s Chief Financial Officer, “Our strong Q4
results capped a year of tremendous performance across practically every
revenue division in the company. For full year 2017, Green Dot delivered
total operating revenues of $890 million, representing year-over-year
growth of 24%; adjusted EBITDA of $206 million, representing year over
year growth of 32% and reflecting year-over-year margin expansion of 140
basis points; and non-GAAP EPS of $2.16, representing year-over-year
growth of 48%. Green Dot generated cash flow from operations of $55
million during the quarter and $218 million for the full year, with
nearly $49 million of unencumbered cash on our balance sheet as of
year-end. As a result of the 2017 Tax Cuts and Jobs Act, we expect that,
in 2018, our effective tax rate will decline to approximately 25%,
generating at the mid-point of our 2018 guidance an incremental $0.41 of
earnings per share, or approximately $22 million of incremental after
tax earnings.”

Outlook for 2018

Green Dot has provided its outlook for 2018. Green Dot’s outlook is
based on a number of assumptions that management believes are reasonable
at the time of this earnings release. Information regarding potential
risks that could cause the actual results to differ from these
forward-looking statements is set forth below and in Green Dot's filings
with the Securities and Exchange Commission.

Total Operating Revenues

Green Dot expects its full year total operating revenues to be between
$982 million and $997 million.

For Q1, Green Dot expects total operating revenues to be between $295
million and $300 million.

Adjusted EBITDA2

Green Dot expects its full year adjusted EBITDA2 to be
between $236 million and $241 million.

Non-GAAP EPS2

Green Dot expects its full year non-GAAP EPS2 to be between
$2.81 and $2.88.

The components of Green Dot's non-GAAP EPS2 guidance range
are as follows:

Range

Low

High

(In millions except per share data)

Adjusted EBITDA

$

236.0

$

241.0

Depreciation and amortization*

(40.0

)

(40.0

)

Net interest income **

8.5

8.5

Non-GAAP pre-tax income

$

204.5

$

209.5

Tax impact***

(51.1

)

(52.4

)

Non-GAAP net income

$

153.4

$

157.1

Diluted weighted-average shares issued and outstanding

54.5

54.5

Non-GAAP earnings per share

$

2.81

$

2.88

*

Excludes the impact of amortization of acquired intangible assets

**

Excludes the impact of amortization of deferred financing costs

***

Assumes a non-GAAP effective tax rate of 25% for full year. This
rate reflects the expected impact of the new tax law (the Tax Cuts
and Jobs Act)

1

Reconciliations of net income to non-GAAP net income, diluted
earnings per share to non-GAAP diluted earnings per share and net
income to adjusted EBITDA, respectively, are provided in the tables
immediately following the consolidated financial statements.
Additional information about the Company's non-GAAP financial
measures can be found under the caption “About Non-GAAP Financial
Measures” below.

2

Reconciliations of forward-looking guidance for these non-GAAP
financial measures to their respective, most directly comparable
projected GAAP financial measures are provided in the tables
immediately following the reconciliation of Net Income to Adjusted
EBITDA.

Starting in 2019, Green Dot intends to make the following revisions to
its GAAP and non-GAAP financial presentations:

First, for its GAAP reporting beginning in 2019, Green Dot intends to
present net interest income generated at Green Dot Bank from the
investment of customer deposits as a component of consolidated GAAP
total operating revenues; whereas today, that item is reported below
operating income and is consolidated along with net interest income
generated by other entities within the consolidated enterprise. Net
interest income at Green Dot Bank is becoming an increasingly important
revenue component for Green Dot because the ability to invest growing
customer balances is a truly unique and compelling advantage of Green
Dot as a regulated bank. It is also becoming a more important element in
its economic relationships with BaaS partners. For these reasons, Green
Dot believes including this item in total operating revenues is the most
accurate presentation of its evolving business. All other non-operating
net interest income generated by other entities within the consolidated
enterprise will continue to be reported below operating income.

Second, starting at the same time in 2019, Green Dot intends to present
a new non-GAAP revenue figure that reduces GAAP total operating revenue
by commissions and certain processing-related costs associated with
certain BaaS partner programs where the partner, not Green Dot, controls
customer acquisition. Green Dot believes that as these kinds of
partnerships become more material, continuing to report the associated
revenue on a gross basis could have the unintentional effect of
overstating Green Dot’s revenue from such programs; and therefore, also
have the effect of understating the associated consolidated adjusted
EBITDA margins. Green Dot's reporting of GAAP revenues from those
selected BaaS program revenue will continue to be on a gross basis. The
prospective presentation revisions starting in 2019 will not impact the
calculation or presentation of GAAP or non-GAAP diluted EPS.

Green Dot will continue to guide and report results throughout 2018
using its current GAAP and non-GAAP presentation format. However, to aid
in a smooth transition, Green Dot will also provide supplemental
reporting throughout 2018 reflecting its results under the new 2019 GAAP
and non-GAAP presentations. In this way, investors will have the
opportunity to become familiar with those revised presentations well
before official deployment in 2019.

Conference Call

The Company will host a conference call to discuss fourth quarter 2017
financial results today at 5:00 p.m. ET. Hosting the call will be Steve
Streit, Chief Executive Officer, and Mark Shifke, Chief Financial
Officer. The conference call can be accessed live over the phone by
dialing (888) 348-8307, or for international callers (412) 902-4242. A
replay will be available approximately two hours after the call
concludes and can be accessed by dialing (844) 512-2921, or for
international callers (412) 317-6671; and entering the conference ID
10116963. The replay of the webcast will be available until Wednesday,
February 28, 2018. The call will be webcast live from the Company's
investor relations website at http://ir.greendot.com/.

Forward-Looking Statements

This earnings release contains forward-looking statements, which are
subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements include, among other
things, statements regarding the Company's future performance contained
under "Outlook for 2018" and in the quotes of its executive officers and
other future events that involve risks and uncertainties. Actual results
may differ materially from those contained in the forward-looking
statements contained in this earnings release, and reported results
should not be considered as an indication of future performance. The
potential risks and uncertainties that could cause actual results to
differ from those projected include, among other things, the timing and
impact of revenue growth activities, the Company's dependence on
revenues derived from Walmart, impact of competition, the Company's
reliance on retail distributors for the promotion of its products and
services, demand for the Company's new and existing products and
services, continued and improving returns from the Company's investments
in new growth initiatives, potential difficulties in integrating
operations of acquired entities and acquired technologies, the Company's
ability to operate in a highly regulated environment, changes to
existing laws or regulations affecting the Company's operating methods
or economics, the Company's reliance on third-party vendors, changes in
credit card association or other network rules or standards, changes in
card association and debit network fees or products or interchange
rates, instances of fraud developments in the prepaid financial services
industry that impact prepaid debit card usage generally, business
interruption or systems failure, and the Company's involvement
litigation or investigations. These and other risks are discussed in
greater detail in the Company's Securities and Exchange Commission
filings, including its most recent annual report on Form 10-K and
quarterly report on Form 10-Q, which are available on the Company's
investor relations website at ir.greendot.com
and on the SEC website at www.sec.gov.
All information provided in this release and in the attachments is as
of February 21, 2018, and the Company assumes no obligation to update
this information as a result of future events or developments.

About Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements presented
in accordance with accounting principles generally accepted in the
United States of America (GAAP), the Company uses measures of operating
results that are adjusted to exclude net interest income and expense;
income tax benefit and expense; depreciation and amortization, including
amortization of acquired intangibles; employee stock-based compensation
expense; incremental expenses related to the delay in migration of the
Company’s remaining customer accounts from its former processor to its
new processor; change in the fair value of contingent consideration;
transaction costs; impairment charges; extraordinary severance expenses;
legal settlement expenses; other charges and income; and income tax
effects. This earnings release includes non-GAAP net income, non-GAAP
earnings per share, non-GAAP weighted-average shares issued and
outstanding and adjusted EBITDA. It also includes full-year 2018
guidance for adjusted EBITDA, non-GAAP net income and non-GAAP EPS.
These non-GAAP financial measures are not calculated or presented in
accordance with, and are not alternatives or substitutes for, financial
measures prepared in accordance with GAAP, and should be read only in
conjunction with the Company's financial measures prepared in accordance
with GAAP. The Company's non-GAAP financial measures may be different
from similarly-titled non-GAAP financial measures used by other
companies. The Company believes that the presentation of non-GAAP
financial measures provides useful information to management and
investors regarding underlying trends in its consolidated financial
condition and results of operations. The Company's management regularly
uses these supplemental non-GAAP financial measures internally to
understand, manage and evaluate the Company's business and make
operating decisions. For additional information regarding the Company's
use of non-GAAP financial measures and the items excluded by the Company
from one or more of its historic and projected non-GAAP financial
measures, investors are encouraged to review the reconciliations of the
Company's historic and projected non-GAAP financial measures to the
comparable GAAP financial measures, which are attached to this earnings
release, and which can be found by clicking on “Financial Information”
in the Investor Relations section of the Company's website at http://ir.greendot.com/.

About Green Dot

Green Dot Corporation is a pro-consumer bank holding company and
financial technology innovator with a mission to reinvent personal
banking for the masses. Green Dot employs a unique “products and
platform” operating model whereby it uses its robust banking and
technology assets to design, build and distribute its own branded
financial services products directly to consumers through a large-scale
omni-channel national distribution platform; while also allowing
qualified third party partners to access those same banking and
technology assets to design, build and distribute their own bespoke
financial services directly to their consumers through their own
distribution platforms. Through its six revenue divisions plus Green Dot
Bank, Green Dot is a leading provider of prepaid cards, debit cards,
checking accounts, secured credit cards, payroll debit cards, consumer
cash processing services, wage disbursements and tax refund processing
services. With approximately 100,000 major name U.S. retail stores
selling its products, several leading direct-to-consumer websites,
thousands of tax preparation offices, several apps available in the two
leading app stores and distribution through several enterprise-scale
“Banking as a Service,” or BaaS, partnerships, Green Dot is one of the
most broadly distributed banking franchises in the United States. Green
Dot Corporation is headquartered in Pasadena, California, with
additional facilities throughout the United States and in Shanghai,
China.

GREEN DOT CORPORATIONCONSOLIDATED BALANCE SHEETS

December 31, 2017

December 31, 2016

(unaudited)

Assets

(In thousands, except par value)

Current assets:

Unrestricted cash and cash equivalents

$

919,243

$

732,676

Restricted cash

90,852

12,085

Investment securities available-for-sale, at fair value

11,889

46,686

Settlement assets

209,399

137,083

Accounts receivable, net

35,277

40,150

Prepaid expenses and other assets

47,086

32,186

Income tax receivable

7,459

12,570

Total current assets

1,321,205

1,013,436

Investment securities available-for-sale, at fair value

141,620

161,740

Loans to bank customers, net of allowance for loan losses of $291
and $277 as of December 31, 2017 and 2016, respectively

18,570

6,059

Prepaid expenses and other assets

8,179

4,142

Property and equipment, net

97,282

82,621

Deferred expenses

21,791

16,647

Net deferred tax assets

6,507

4,648

Goodwill and intangible assets

582,377

451,051

Total assets

$

2,197,531

$

1,740,344

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

34,863

$

22,856

Deposits

1,022,180

737,414

Obligations to customers

95,354

46,043

Settlement obligations

6,956

4,877

Amounts due to card issuing banks for overdrawn accounts

1,371

1,211

Other accrued liabilities

123,397

102,426

Deferred revenue

30,875

25,005

Note payable

20,906

20,966

Income tax payable

74

—

Total current liabilities

1,335,976

960,798

Other accrued liabilities

30,520

12,330

Note payable

58,705

79,720

Net deferred tax liabilities

7,780

3,763

Total liabilities

1,432,981

1,056,611

Stockholders’ equity:

Class A common stock, $0.001 par value; 100,000 shares authorized
as of December 31, 2017and 2016; 51,136 and 50,513 shares
issued and outstanding as of December 31, 2017 and 2016,
respectively

51

51

Additional paid-in capital

354,789

358,155

Retained earnings

410,440

325,708

Accumulated other comprehensive loss

(730

)

(181

)

Total stockholders’ equity

764,550

683,733

Total liabilities and stockholders’ equity

$

2,197,531

$

1,740,344

GREEN DOT CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)

Three Months EndedDecember 31,

Year Ended December 31,

2017

2016

2017

2016

(In thousands, except per share data)

Operating revenues:

Card revenues and other fees

$

105,685

$

82,337

$

414,775

$

337,821

Processing and settlement service revenues

38,423

31,541

217,454

184,342

Interchange revenues

68,881

48,890

257,922

196,611

Total operating revenues

212,989

162,768

890,151

718,774

Operating expenses:

Sales and marketing expenses

73,146

65,487

280,561

249,096

Compensation and benefits expenses

55,299

37,377

194,654

159,456

Processing expenses

41,288

26,796

161,011

107,556

Other general and administrative expenses

39,551

36,630

155,601

139,350

Total operating expenses

209,284

166,290

791,827

655,458

Operating income (loss)

3,705

(3,522

)

98,324

63,316

Interest income

3,431

1,896

11,243

7,367

Interest expense

(1,514

)

(1,503

)

(6,109

)

(9,122

)

Income (loss) before income taxes

5,622

(3,129

)

103,458

61,561

Income tax expense (benefit)

(6,606

)

(1,784

)

17,571

19,961

Net income (loss)

12,228

(1,345

)

85,887

41,600

Income attributable to preferred stock

—

—

—

(802

)

Net income (loss) available to common stockholders

$

12,228

$

(1,345

)

$

85,887

$

40,798

Basic earnings (loss) per common share:

$

0.24

$

(0.03

)

$

1.70

$

0.82

Diluted earnings (loss) per common share:

$

0.23

$

(0.03

)

$

1.61

$

0.80

Basic weighted-average common shares issued and outstanding:

50,933

50,371

50,482

49,535

Diluted weighted-average common shares issued and outstanding:

54,198

51,662

53,198

50,797

GREEN DOT CORPORATIONCONSOLIDATED STATEMENTS OF
CASH FLOWS(UNAUDITED)

Year Ended December 31,

2017

2016

(In thousands)

Operating activities

Net income

$

85,887

$

41,600

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation and amortization of property and equipment

33,470

39,460

Amortization of intangible assets

31,110

23,021

Provision for uncollectible overdrawn accounts

77,145

74,841

Employee stock-based compensation

40,734

28,321

Amortization of premium on available-for-sale investment securities

1,510

1,357

Change in fair value of contingent consideration

(9,672

)

(2,500

)

Amortization of deferred financing costs

1,589

1,534

Impairment of capitalized software

1,326

142

Deferred income tax expense

2,780

1,270

Changes in operating assets and liabilities:

Accounts receivable, net

(68,368

)

(74,851

)

Prepaid expenses and other assets

(16,841

)

1,131

Deferred expenses

(2,098

)

(2,138

)

Accounts payable and other accrued liabilities

27,982

(19,156

)

Deferred revenue

4,689

2,004

Income tax receivable/payable

5,067

(3,662

)

Other, net

2,000

2,141

Net cash provided by operating activities

218,310

114,515

Investing activities

Purchases of available-for-sale investment securities

(58,665

)

(135,920

)

Proceeds from maturities of available-for-sale securities

71,338

105,544

Proceeds from sales of available-for-sale securities

40,310

1,430

Increase in restricted cash

(78,762

)

(6,292

)

Payments for acquisition of property and equipment

(44,142

)

(43,273

)

Net (increase) decrease in loans

(12,511

)

220

Acquisition, net of cash acquired

(141,498

)

—

Net cash used in investing activities

(223,930

)

(78,291

)

Financing activities

Borrowings from notes payable

20,000

—

Repayments of borrowings from notes payable

(42,500

)

(22,500

)

Borrowings on revolving line of credit

335,000

145,000

Repayments on revolving line of credit

(335,000

)

(145,000

)

Proceeds from exercise of options

24,161

14,917

Taxes paid related to net share settlement of equity awards

(18,077

)

(8,223

)

Net increase in deposits

284,766

85,269

Net decrease in obligations to customers

(20,926

)

(83,372

)

Contingent consideration payments

(3,104

)

(2,755

)

Repurchase of Class A common stock

(51,969

)

(59,013

)

Deferred financing costs

(164

)

—

Net cash provided by (used in) financing activities

192,187

(75,677

)

Net increase (decrease) in unrestricted cash and cash equivalents

186,567

(39,453

)

Unrestricted cash and cash equivalents, beginning of year

732,676

772,129

Unrestricted cash and cash equivalents, end of year

$

919,243

$

732,676

Cash paid for interest

$

4,520

$

7,586

Cash paid for income taxes

$

9,603

$

22,316

GREEN DOT CORPORATIONREPORTABLE SEGMENTS(UNAUDITED)

Year Ended December 31, 2017

Account Services

Processing andSettlement Services

Corporate and Other

Total

(In thousands)

Operating revenues

$

693,103

$

228,444

$

(31,396

)

$

890,151

Operating expenses

549,375

166,444

76,008

791,827

Operating income

$

143,728

$

62,000

$

(107,404

)

$

98,324

Year Ended December 31, 2016

Account Services

Processing andSettlement Services

Corporate and Other

Total

(In thousands)

Operating revenues

$

544,271

$

203,569

$

(29,066

)

$

718,774

Operating expenses

454,187

137,296

63,975

655,458

Operating income

$

90,084

$

66,273

$

(93,041

)

$

63,316

The Company's operations are comprised of two reportable segments: 1)
Account Services and 2) Processing and Settlement Services. The Account
Services segment consists of revenues and expenses derived from the
Company's branded and private label deposit account programs. These
programs include Green Dot-branded and affinity-branded GPR card
accounts, private label GPR card accounts, checking accounts, open-loop
gift cards and secured credit cards. The Processing and Settlement
Services segment consists of revenues and expenses derived from reload
services through the Green Dot Network, money processing and the
Company's tax refund processing services. The Corporate and Other
segment primarily consists of eliminations of intersegment revenues and
expenses, unallocated corporate expenses, depreciation and amortization,
and other costs that are not considered when management evaluates
segment performance.

GREEN DOT CORPORATIONReconciliation of Net Income
to Non-GAAP Net Income (1)(Unaudited)

Three Months EndedDecember 31,

Year Ended December 31,

2017

2016

2017

2016

(In thousands, except per share data)

Net income (loss)

$

12,228

$

(1,345

)

$

85,887

$

41,600

Employee stock-based compensation expense (3)

13,350

7,380

40,734

28,321

Amortization of acquired intangibles (4)

8,184

5,749

31,110

23,021

Change in fair value of contingent consideration (4)

(2,172

)

3,000

(9,672

)

(2,500

)

Transaction costs (4)

45

—

2,276

91

Amortization of deferred financing costs (5)

398

384

1,589

1,534

Impairment charges (5)

260

4

1,326

142

Extraordinary severance expenses (6)

532

745

2,162

1,702

Incremental processor expenses, net (8)

—

—

2,870

—

Legal settlement expenses (5)

—

—

3,500

—

Other (income) expenses (5)

—

(189

)

(373

)

2,802

Income tax effect (7)

(17,092

)

(6,123

)

(46,504

)

(21,155

)

Non-GAAP net income

$

15,733

$

9,605

$

114,905

$

75,558

Diluted earnings per common share

GAAP

$

0.23

$

(0.03

)

$

1.61

$

0.80

Non-GAAP

$

0.29

$

0.19

$

2.16

$

1.46

Diluted weighted-average common shares issued and outstanding*

GAAP

54,198

51,662

53,198

50,797

Non-GAAP

54,198

51,662

53,198

51,771

*

Reconciliations between GAAP and non-GAAP diluted weighted-average
shares issued and outstanding are provided in the next table.

Represents the diluted weighted-average shares of Class A common
stock for the periods indicated.

(1)

To supplement the Company’s consolidated financial statements
presented in accordance with GAAP, the Company uses measures of
operating results that are adjusted to exclude various, primarily
non-cash, expenses and charges. These financial measures are not
calculated or presented in accordance with GAAP and should not be
considered as alternatives to or substitutes for operating revenues,
operating income, net income or any other measure of financial
performance calculated and presented in accordance with GAAP. These
financial measures may not be comparable to similarly-titled
measures of other organizations because other organizations may not
calculate their measures in the same manner as the Company does.
These financial measures are adjusted to eliminate the impact of
items that the Company does not consider indicative of its core
operating performance. You are encouraged to evaluate these
adjustments and the reasons the Company considers them appropriate.

The Company believes that the non-GAAP financial measures it
presents are useful to investors in evaluating the Company’s
operating performance for the following reasons:

• the Company records employee stock-based compensation from
period to period, and recorded employee stock-based compensation
expenses of approximately $13.4 million and $7.4 million for the
three months ended December 31, 2017 and 2016, respectively. By
comparing the Company’s adjusted EBITDA, non-GAAP net income and
non-GAAP diluted earnings per share in different historical
periods, investors can evaluate the Company’s operating results
without the additional variations caused by employee stock-based
compensation expense, which may not be comparable from period to
period due to changes in the fair market value of the Company’s
Class A common stock (which is influenced by external factors like
the volatility of public markets and the financial performance of
the Company’s peers) and is not a key measure of the Company’s
operations;

• adjusted EBITDA is widely used by investors to measure a
company’s operating performance without regard to items, such as
net interest income and expense, income tax benefit and expense,
depreciation and amortization, employee stock-based compensation
expense, incremental expenses related to the delay in migration of
the Company’s remaining customer accounts from its former
processor to its new processor, changes in the fair value of
contingent consideration, transaction costs, impairment charges,
severance costs related to extraordinary personnel reductions,
legal settlement expenses, and other charges and income that can
vary substantially from company to company depending upon their
respective financing structures and accounting policies, the book
values of their assets, their capital structures and the methods
by which their assets were acquired; and

• securities analysts use adjusted EBITDA as a supplemental
measure to evaluate the overall operating performance of companies.

The Company’s management uses the non-GAAP financial measures:

• as measures of operating performance, because they exclude the
impact of items not directly resulting from the Company’s core
operations;

• for planning purposes, including the preparation of the
Company’s annual operating budget;

• to allocate resources to enhance the financial performance of
the Company’s business;

• to evaluate the effectiveness of the Company’s business
strategies;

• to establish metrics for variable compensation; and

• in communications with the Company’s board of directors
concerning the Company’s financial performance.

The Company understands that, although adjusted EBITDA and other
non-GAAP financial measures are frequently used by investors and
securities analysts in their evaluations of companies, these
measures have limitations as an analytical tool, and you should not
consider them in isolation or as substitutes for analysis of the
Company’s results of operations as reported under GAAP. Some of
these limitations are:

• that these measures do not reflect the Company’s capital
expenditures or future requirements for capital expenditures or
other contractual commitments;

• that these measures do not reflect changes in, or cash
requirements for, the Company’s working capital needs;

• that these measures do not reflect interest expense or interest
income;

• that these measures do not reflect cash requirements for income
taxes;

• that, although depreciation and amortization are non-cash
charges, the assets being depreciated or amortized will often have
to be replaced in the future, and these measures do not reflect
any cash requirements for these replacements; and

• that other companies in the Company’s industry may calculate
these measures differently than the Company does, limiting their
usefulness as comparative measures.

(2)

The Company does not include any income tax impact of the associated
non-GAAP adjustment to adjusted EBITDA, as the case may be, because
each of these non-GAAP financial measures is provided before income
tax expense.

(3)

This expense consists primarily of expenses for employee stock
options and restricted stock units (including performance-based
restricted stock units). Employee stock-based compensation expense
is not comparable from period to period due to changes in the fair
market value of the Company’s Class A common stock (which is
influenced by external factors like the volatility of public markets
and the financial performance of the Company’s peers) and is not a
key measure of the Company’s operations. The Company excludes
employee stock-based compensation expense from its non-GAAP
financial measures primarily because it consists of non-cash
expenses that the Company does not believe are reflective of ongoing
operating results. Further, the Company believes that it is not
useful to investors to understand the impact of employee stock-based
compensation to its results of operations. This expense is included
as a component of compensation and benefits expenses on our
consolidated statements of operations.

(4)

The Company excludes certain income and expenses that are the result
of acquisitions. These acquisition related adjustments include the
amortization of acquired intangible assets, changes in the fair
value of contingent consideration, settlements of contingencies
established at time of acquisition and other acquisition related
charges, such as integration charges and professional and legal
fees, which result in the Company recording expenses or fair value
adjustments in its GAAP financial statements. The Company analyzes
the performance of its operations without regard to these
adjustments. In determining whether any acquisition related
adjustment is appropriate, the Company takes into consideration,
among other things, how such adjustments would or would not aid in
the understanding of the performance of its operations. These items
are included as a component of other general and administrative
expenses on our consolidated statements of operations.

(5)

The Company excludes certain income and expenses that are not
reflective of ongoing operating results. It is difficult to estimate
the amount or timing of these items in advance. Although these
events are reflected in the Company's GAAP financial statements, the
Company excludes them in its non-GAAP financial measures because the
Company believes these items may limit the comparability of ongoing
operations with prior and future periods. These adjustments include
amortization attributable to deferred financing costs, impairment
charges related to internal-use software, legal settlement expenses
and other charges, which consists of expenses incurred with our
proxy contest. In determining whether any such adjustment is
appropriate, the Company takes into consideration, among other
things, how such adjustments would or would not aid in the
understanding of the performance of its operations. These items,
except for amortization of deferred financing costs, which is
included as a component of interest expense, are included within
other general and administrative expenses on our consolidated
statements of operations.

(6)

During the three and twelve months ended December 31, 2017, the
Company recorded charges of $0.5 million and $2.2 million,
respectively, for severance costs related to extraordinary personnel
reductions. Although severance expenses are an ordinary part of its
operations, the magnitude and scale of the reduction in workforce
the Company began to implement in the three months ended September
30, 2016 is not expected to be repeated. This expense is included as
a component of compensation and benefits expenses on the Company's
consolidated statements of operations.

(7)

Represents the tax effect for the related non-GAAP measure
adjustments using the Company's year to date non-GAAP effective tax
rate. It also excludes the impact of excess tax benefits related to
stock-based compensation and one-time favorable adjustments to the
Company’s deferred taxes assets and liabilities, including the
remeasurement of the Company’s deferred tax assets and liabilities
associated with the Tax Cuts and Jobs Act (the “Tax Act”). As of
December 31, 2017, the Company has not completed its accounting for
the tax effects of the Tax Act. The Company’s tax benefit is
provisional based on reasonable estimates for those tax effects.
Changes to these estimates or new guidance issued by regulators may
materially impact the Company’s provision for income taxes and
effective tax rate in the period in which the adjustments are made.
The Company expects to complete its accounting for the tax effects
in the short term.

(8)

Represents the net incremental expenses associated with the
Company's need to continue to support customer accounts on its
legacy transaction processor that it had intended to migrate to its
new processing platform in 2016. During the year ended December 31,
2017, the Company received $6.5 million as a partial recovery of
these costs.

(9)

These amounts represent estimated adjustments for net interest
expense, income taxes, depreciation and amortization, employee
stock-based compensation expense, contingent consideration,
transaction costs, impairment charges, severance costs related to
extraordinary personnel reductions, legal settlement expenses, and
other income and expenses. Employee stock-based compensation expense
includes assumptions about the future fair value of the Company’s
Class A common stock (which is influenced by external factors like
the volatility of public markets and the financial performance of
the Company’s peers).

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Cards provided by Green Dot Corporation. The MasterCard Card is issued by Green Dot Bank pursuant to a license from MasterCard International Incorporated. The Visa Card is issued by Green Dot Bank pursuant to a license from Visa U.S.A Inc. Green Dot Corporation is a member service provider for Green Dot Bank, Member FDIC. MasterCard and the MasterCard Brand Mark are registered trademarks of MasterCard International Incorporated. Visa is a registered trademark of Visa International Service Association. Green Dot is a registered trademark of Green Dot Corporation.

Green Dot Bank operates under the following registered trade names: GoBank, Green Dot Bank and Bonneville Bank. All of these registered trade names are used by, and refer to, a single FDIC-insured bank, Green Dot Bank. Deposits under any of these trade names are deposits with Green Dot Bank and are aggregated for deposit insurance coverage.